Alleged Misrepresentations Helped Motorola get a $50 Million Federal Grant

Reverse revolving door alleged in which company executives join the public sector and act to benefit their ex-employers.

As a Motorola saleswoman from 2004 to 2006, Laura Phillips coached local officials on how to secure state and federal grant money to pay for new public safety radio equipment.

Later, Phillips used her knowledge in a much different way.

When she was put at the helm of a government agency overseeing funding for emergency communication projects in the San Francisco Bay Area, her office shepherded an unusual federal grant that handed her former employer a $50 million deal to build the nation’s first regional high-speed broadband network for emergency responders.

The episode shines light on what might be called a reverse revolving door: Instead of leaving government for private industry or lobbying jobs, numerous employees of Motorola and its rivals have quit their private-sector jobs for government positions in which they’ve taken actions benefiting their ex-employers.

In Phillips’ case, critics charged that her office pursued the grant without the knowledge of some of the six affected major cities and counties, and that Motorola competitors got little shot at the deal. Phillips denied favoring Motorola, but her maneuverings sowed so much distrust that she wound up in the crosshairs of a federal investigation.

Investigators for the Commerce Department’s inspector general’s office ultimately concluded that Phillips’ office rammed through a grant application that was rife with “significant misrepresentations,” including that a joint authority for 10 Bay Area counties existed a year before its first meeting.

Phillips wasn’t found to have engaged in misconduct, but the project is now dead.

In Anchorage, Tryg Erickson said he spent more than a quarter-century working as a Motorola salesman before leaving in 2005 to take a job as director of communications and electronics for Alaska’s biggest city. Two years later, the city bought a $25 million radio system from Motorola without soliciting proposals from other vendors. Instead, it adopted terms from a competitively bid contract that the state had awarded to the company in 1999, Erickson recalled.

The citywide public safety system was a project, he said, that “everyone knew would go to Motorola.”

“My previous customer was my predecessor” in the city job, he said, “and that’s not as uncommon as it would seem. There’s pretty much Motorola and anybody else.”

John Powell, chair of a National Public Safety Telecommunications Council panel on emergency radios, said that the problem is significant enough that restrictions are needed to bar employees of government vendors from taking local and state jobs in which they influence grant or contract awards. Such rules, he said, could be modeled after Pentagon restrictions covering personnel who migrate to the private sector.

“I think there’s a natural tendency, whether you could ever prove it or not, for such employees to support the technology from the company for which they worked, particularly if they still have stock in those companies,” Powell said in a phone interview.

Phillips initially left Motorola to serve as chief of San Francisco’s Emergency Communications Department under then-Mayor Gavin Newsom, although her main qualifying experience was as a radio dispatch manager in Sunnyvale, Calif.

In 2007, after her office struggled to respond when a container ship rammed the base of the San Francisco-Oakland Bay Bridge, she was shifted to a job heading a new agency managing the flow of state and federal grants.

At the Bay Area Urban Areas Security Initiative, Phillips often operated in secrecy. She hired two other former Motorola employees and set about pursuing funding to build the nation’s first high-speed public safety data and video network, to be known as BayWEB. It would serve the cities of San Francisco, San Jose and Oakland, as well as their surrounding counties.

However, a broader joint powers authority that would govern the process had yet to form.

Without advising the three cities or Santa Clara County, Phillips’ office moved ahead on their behalf, seeking approval from the Federal Communications Commission to use a slice of the wireless spectrum for BayWEB, federal investigators found.

Her office drew interest in building such a project from eight firms, include AT&T, Northrop Grumman and Motorola. After learning in early 2010 that the Commerce Department was about to dispense public safety broadband grants, Phillips’ office asked the eight firms to summarize their approaches, this time eliciting four responses.

Months later, leaders of the three large cities learned that Phillips’ office had forged a highly unusual “public-private partnership” to win a $50.6 million grant for Motorola and Alameda County Sheriff Greg Ahern. Motorola agreed to put up matching funds to cover the rest of the $72 million project.

Stunned officials of San Jose and other jurisdictions balked at joining the new system, fearing its cost could balloon to $600 million, much of it falling on participating cities and counties. They also questioned several assertions in the grant application, including that Motorola had nearly 200 “shovel ready” antenna sites, later shown to be an exaggeration.

The Commerce Department investigators concluded that the misleading information was “not attributable” to Motorola and found no “overt favoritism” toward the company.

Phillips and Clement Ng, who sent out the notice later referred to as a formal request for bids, soon left their jobs.

Reached at her current position with the Federal Emergency Management Agency, Phillips said via email that state and federal investigators had found “no improprieties” and referred other questions to agencies in California.

Barry Fraser, general manager for the Bay Area joint powers authority overseeing BayWEB, had shared ambitions of extending the network as far as 50 miles east, even to Sacramento, which he said had expressed interest.

To move forward, however, BayWEB still needed to lease space on the federal wireless spectrum. Motorola could not agree to terms with FirstNet, a new Commerce Department unit tasked by Congress to create a nationwide emergency broadband system.

In December, with the work on BayWEB underway, FirstNet’s board halted funding for the project.